We are thrilled to announce an expanded three-year global partnership with UNHCR, the UN Refugee Agency to launch a special initiative titled ‘Together We Can Bring Education to African Children & Youth.’
This project is dedicated to providing quality education to African refugee children and youth. Over the next three years, more than 54,000 refugee children and 15 DAFI scholars will benefit, contributing to Africa’s sustainable development.
Author: Digital Editor
Bound by Duty, Lawyers Fight for Fair Pay in Free Legal Aid Battle
Key Takeaways:
- The Ministry of Justice’s directive plans to enforce pro bono work among private lawyers.
- Lawyers can claim a one percent fee on successful cases with awards exceeding five million Birr.
- Criticism mounts over low compensation and potential client-lawyer conflicts.
- Control over lawyer assignments by a prosecutorial office is seen as a conflict of interest.
- Stricter criteria for aid eligibility are called for to ensure the right individuals benefit.
The Ministry of Justice has taken a decisive step toward enforcing a four-year-old mandate that requires private lawyers to provide free help to the destitute. A draft directive, now posted for public comment, outlines how advocates and law firms should handle pro bono work and how they will be monitored. Justice officials say the goal is a system that is “fair, transparent and consistent,” but the plan has already stirred sharp debate within the legal community.
A 2021 amendment to the Federal Advocacy Service Licensing & Administration law obliges licensed practitioners, as well as lawyers on a firmโs payroll, to represent up to three indigent clients a year. The Attorney Generalโs Office assigns the cases, and lawyers should keep detailed records to prove they met the obligation. The new directive attempts to codify those rules and turn them into day-to-day practice.
The draft also addresses the thorny question of money. Although free legal aid is supposed to be free, the directive allows lawyers to collect a fee if a lawsuit ends in a cash or property award. Under the proposal, an advocate may claim one percent of any recovery that exceeds five million Birr. The law prohibits any other payment.
However, many lawyers say the cap is far too low to recognise their work.
โA disrepute to the advocatesโ work,โ said Temesgn Desalegn, an attorney who often represents low-income clients. โIf a lawyer wins one million Birr for a client, they should be entitled to 10pc, not nothing. A person who wins a million Birr is no longer poor. The lawyer should not be forced to work almost for free.โ
Temesgn argues that the directive should copy private contingency agreements, which typically grant a lawyer 10pc of damages. He is not alone.
Tegene Zewdu, a lawyer and legal advisor with two yearsโ experience, says the rule needs teeth.
โLitigation costs, including lawyer fees, are reimbursed to the winning party,โ Tegene said. โAt the very least, lawyers should recover their expenses.โ
He wants every pro bono client to sign a contract promising payment if the case succeeds.
Another flashpoint is the draft rule that allows a free-aid client to fire a lawyer at any time. Tegene warns that the clause could be misused by clients who see their case heading toward victory and want to dodge the fee. He urged that any termination request also carry the lawyerโs view, for a neutral body can judge whether the break is fair.
Beyond fees, some critics focus on who should control the assignments. The Attorney Generalโs Office picks which lawyer handles cases, even though the Office also supervises prosecutions.
Daniel Fikadu, who practices in courts, called this a conflict of interest.
โProsecutors and defence lawyers are adversaries by nature,โ he said. โThe executive branch should not control lawyer assignments.โ
Daniel believes oversight should pass to the Federal Bar Association, an independent body set up to advocate for the profession. He also says too many assignments go to the same handful of attorneys, leaving others unable to fulfil their three-case quota.
The Ministry’s officials declined to comment while the text is still a draft.
โA forum will be called to gather expert feedback,โ said Reta Nigat, an expert in the Directorate of Legal Services and Free Legal Aid Services.
The draft is posted on the Ministryโs website, and the public can send comments online.
Critics argue the draft leans heavily on obligations but lightly on rewards.
Legal counsel Abdurazak Nesro wants formal recognition for lawyers who meet or exceed the requirements. He also questioned how applicants would prove they have a low income. The current wording tells a would-be client to file declarations from three witnesses at an administrative body or social court, or to present documents from โwomenโs and social welfare institutions.โ
Abdurazak fears those papers โcould be easily obtained by those with the right connections.โ He urged lawmakers to spell out which agencies count as social institutions and to impose stricter checks for the aid to reach the genuinely needy.
Habtamu Birhanu, who teaches law at Dilla University, backs that call. According to him, the entire purpose of the directive โ widening access to justice โ will fail if the wrong people slip through. Beneficiaries, he added, should meet clear, testable criteria, with proven inability to pay, justifiable legal claim, and honest intent. The directive does warn applicants not to abuse the courts or file cases that contradict the law, but Habtamu thinks the rules need more detail.
Ethiopia is not alone in wrestling with pro bono policy. Kenyaโs National Legal Aid Service, run by the Law Society of Kenya, focuses on civil disputes, such as family law, land rights, and job cases, and serves clients who pass a means test. Lawyers there often work through clinics and outreach programs in poor communities and receive modest stipends funded by a mix of government money and donor grants.
Ethiopian lawyers point to this model as proof that incentives matter.
Advocates also face a duty that can be hard to meet. Many firms say the paperwork alone is burdensome. Small practices lack staff to track filings, deadlines and compliance. Some lawyers fear the draft could push them to decline paying clients to free up time for mandatory aid.
โThe motive is noble,โ said a lawyer who asked to remain anonymous. โNobody objects to helping the poor. But, if the state wants quality representation for indigent people, it must value the lawyersโ time and skill.โ
Leaders of the Federal Bar Association say it has yet to receive the text.
โOnce the draft is officially submitted, our experts will review it and give a formal opinion,โ said Zerihun Petros, the groupโs secretary general.
CREDIT AND DEVICES FOR THE MASSES
Neway Magersa (Left), president of Sinqee Bank, shared a lighter moment at the Skylight Hotel on Africa Avenue and chuckled with Oromia Regional State senior official Addisu Arega and Ethio telecom’s Chief Executive Officer (CEO), Frehiwot Tamiru. The easy banter masked the scale of the task ahead, turning billions of Birr into millions of new customers, and proving that digital lending can reach corners of Ethiopia that conventional banking has missed.
The nonchalant moment on April 27 marked a day otherwise devoted to hard numbers and ambitious plans. Sinqee Bank and Ethio telecom signed a 15 billion Br agreement to roll out โWabii Digital Finance,โ a lending platform that blends Sinqeeโs balance-sheet muscle with Ethio telecomโs nationwide digital network. The partners said they spent a year hammering out terms that will steer 10 billion Br to small- and medium-size enterprises, four billion Birr to finance smartphones and other devices, and 1.3 billion Br to micro-credit.
Borrowers can seek unsecured loans of up to 130,000 Br or pledge collateral for facilities as large as 1.2 million Br. Personal loans range from 5,000 to 30,000 Br and can be repaid in as little as five days or as long as 45 days. Salary-based credit tops out at one million Birr and is earmarked for roughly 500,000 employees, while device financing offers up to 30,000 Br with a 20pc facilitation fee. โDigital financing needs capital, and now we are doing it,โ said Neway, after outlining Sinqeeโs own metrics: 11.6 billion Br in capital, 44.7 billion Br in outstanding loans and 97.4 billion Br in total assets. The Bank, incorporated in 1999, counts more than 528,000 borrowers across 574 branches.
Frehiwot disclosed that Ethio telecom had spoken with other lenders, but Sinqee was the first to seal a deal. The state-owned operator has already distributed 900,000 handsets in the past nine months and plans to ship two million more under the new program. The companies say the initiative will speed up payments, tighten security, and expand credit to rural and unbanked customers. Automated and data-driven underwriting seeks to cut fraud and funnel working capital to small firms that have long struggled to secure bank loans.
In the Shadows of Renewal, a Generation Struggles to Find Its Place
Takeaways:
- Hana Melakuโs storyย demonstratesย the personal turmoil within the broader issue of mass relocation in Addis Abeba.
- Overcrowded classrooms and stretched resources impede the quality of education for students.
- Despite high enrollment rates, the quality of learning remains a critical concern due to inadequate educational infrastructure.
- Urban development strains reveal the urgent need for comprehensive reform beyond merely building new schools.
- Creative assessment and tailored teaching models offer hope for overcoming systemic educational challenges.
Hana Melaku, a mother of two, had never imagined life outside Cazanchis. One of the historic neighbourhoods of Addis Abeba, it had been her world from birth, a place stitched together by familiar faces and steady rhythms. But a few months ago, she and her family were resettled, carried by the winds of relocation to a condominium unit in a newly established vicinity popularly known as “Ayat 49.”
The move was supposed to be a step forward, a new beginning. Instead, it has left her disoriented and struggling.
Their new home, stark and unfinished, greeted them with missing windows, doors, and no electricity. Although most power issues have been fixed, 33 households still share a three-phase switch, a daily source of tension that is aggravated by a steep 6,000 Br top-up system every two weeks. Social life in the new place feels frozen. Neighbours pass by without a word. Shops and clinics are few and far between, a sharp contrast to the tight-knit and accessible community Hana had always known.
But more than anything, it is her daughter, Mekdelawit Abreham, who weighs most heavily on her mind. At seven, Mekdelawit now squeezes into a packed public school classroom, sharing a desk with nine other children, surrounded by as many as 105 classmates.
“She is not learning anything,” Hana said, her voice low and tired.
Before they moved, Mekdelawit had attended a private school. It was a different world then, with small classes, patient teachers, and space to dream.
That all ended when Hana, unable to find work after the move, could no longer afford the fees that private schools in the new neighbourhood charges. Now, she relies on her husbandโs income, while Mekdelawit returns home each day with dirt-streaked clothes and an increasingly vacant stare.
“I always find her dirty,” Hana said. “Her excitement for school is just gone.”
The transition has been all but smooth. It took Mekdelawit a month after the move to secure a spot in a school. Since then, her grades have slipped, and her disinterest has grown more evident by the day. Hana leafs through her daughterโs exercise books and finds them untouched, homework uncorrected. Teachers seem as overwhelmed as the students. Hana dreams of returning her daughter to private education, but until she can find work, that dream remains out of reach.
Hanaโs story is far from unique.
In the view of the city’s officials, the mass relocation that moved tens of thousands from places like Cazanchis to far-flung outskirts, such as Gelan Gura, was part of an effort to address Addis Abebaโs “renewal” and growing housing shortage. Up to 5,000 households from the Kirkos District were relocated on the southern outskirts of the capital. This has stretched the infrastructure to breaking point.
According to Addisu Shanko head of Kirkos District, the city administration had provided enough schools.
Two schools sit within a kilometre: Gelan Gura Primary and Secondary schools, One and Two. The second school, built specifically for relocated families, is still not fully operational, leaving the first school overwhelmed and operating beyond its capacity.
Teachers like Bersistu Buhuja paint a picture different from the one portrayed by the officials. Handling a KG3 class of 70 students, she struggles to give each child the attention they need. Preparing homework for all her students often means she has to skip lunch entirely.
“Parents get upset when we don’t give the students homework,” she told Fortune. “To give them homework, I’ve to skip lunch.”
Bersistu has been teaching for 14 years and says she has never seen congestion like this. She finds it almost impossible to evaluate students fairly. The surge, she believes, is fuelled by relocated families and by others moving to the area for lower rents.
Classroom overcrowding is more than an inconvenience. It is quietly undermining students’ educational future. Official standards dictate that there should be no more than 40 students in a class. Yet, at places like Ayer Tena Secondary School, over 4,000 students are packed into 71 classrooms, with some rooms cramming in as many as 87 students.
Even essential resources are missing. Science laboratories, where they exist, are poorly stocked. Materials vanish or are used up after a few experiments. According to the Principal, Meberatu Weldegebreal, the crowded conditions feed directly to poor exam results. Last year, only 5.6pc of Ayer Tenaโs more than 1,000 Grade 12 students passed straight into university. Only 66 students made it, while 234 needed remedial programs.
To make up for lost ground, tutorials are now run on Saturdays and after regular hours.
“It’s hard to see them pass, as they were poorly taught in lower grades,” Meberatu said.
Since 1994, Ethiopia has made remarkable strides in access to education. Primary school enrollment has soared, increasing fivefold to over 14 million by 2019. Secondary school numbers have doubled. The countryโs Gross Enrollment Rate now nears 96pc, matching that of some middle-income countries.
But, gains in access have not translated into quality. Studies show that overcrowded classrooms and poor student-teacher ratios can negatively impact learning outcomes. For Grades one to eight, the average pupil-to-section ratio is now 50.1 to one. Dropout and repetition rates remain troubling: overall dropout is at 17.9pc; and in middle schools, the repetition rate hits 11.6pc, compared to three percent for primary levels.
Furi Primary & Middle School is another frontline in this battle. With 2,400 students and as few as 128 teachers, classrooms hold up to 70 students at a time. Habtamu Taffese, the deputy principal, admitted that class sizes breach standards but believes denying students access was “unthinkable.”
Even here, problems have surfaced. Last year, allegations of over-registration and fraud engulfed the school, leading to ongoing legal action, according to Zenebech Molla, secretary of the Parent-Teacher Association. Nonetheless, somehow, Furi boasts impressive exam results: a 100pc pass rate for Grade Six, and 99pc for Grade Eight. Zenebech, reassured by the schoolโs performance, remains hopeful about her childrenโs education.
Habtamu attributed the success to relentless result analysis and focused tutorials. So is the pressure no less stubborn. Overcrowding makes student-centred teaching, proven to be 95pc more effective, almost impossible. Teachers default to lecture methods to survive 45-minute sessions.
Habtamu has noticed something else too: students studying in smaller Afan-Oromo language classes consistently outperform their peers in larger classes.
The city recently introduced a standardised continuous assessment system, affecting more than 2,000 schools and 1.2 million students. The idea is to move beyond final exams and focus on creativity and engagement throughout the year. But, for overstretched schools, it is another administrative burden on top of everything else.
Night classes offer little respite. Teachers are paid a mere 1,000 Br for these sessions and still face the same overcrowded and poorly resourced conditions.
At Akaki Qality Secondary School, the challenges are no less daunting, where 40 of the 122 teachers have completed postgraduate studies. New curriculum demands, such as career and technical education (CTE) and visual arts, have created gaps that schools are struggling to fill.
“We assign biology teachers to teach agriculture,” said Alemayehu Duressa, the schoolโs deputy principal.
Basic needs go unmet. Textbooks for Amharic and Afan-Oromo are missing. Textbooks for career and technical education are often available only in digital format. Facilities are dire. Only one toilet functions for every 163 students, and frequent water shortages have shut down laboratory activities. There are no sports grounds. Only 38.7pc of schools across the country have a functioning library; and 10.9pc have laboratories. While 90.6pc report having toilets, only 37.8pc meet acceptable standards.
Last year, 22 out of Akaki Qality’s 280 students passed the national Grade 12 exam. Ninety others entered remedial programs. Many simply opted for private colleges or jobs instead of pursuing higher education.
Still, enrollment at the school is rising, pushed up by relocated families and a nearby newly established military facility. The student population now is 1,900.
To confront the problem, the Addis Abeba Education Bureau is racing to expand capacity. Thirteen new schools have been built, 256 old schools renovated, and 77 more projects are underway. The city has a student population of 1.3 million, with a little over half attending public schools. Yet, with 1,600 private institutions out of 2,200 schools, private education remains dominant and is largely unregulated, with fees.
Nationally, 85pc of schools are considered below standard. The Ministry of Education has launched the โEducation for the Generationโ movement, raising a total of 81 billion Br and 54 billion Br this year to fund the construction of 6,815 new schools and improvements to tens of thousands more.
But not everyone is convinced that building more schools will fix everything.
According to Fitsum Gebremichael, a PhD candidate in education policy at Addis Abeba University, overcrowding is not the only part of the problem.
“It can’t be considered the sole reason,” he said, pointing to studentsโ readiness to learn and the quality of the curriculum as equally important factors.
Fitsum stated the need for counselling and remedial support when families, such as Hana’s, are relocated, warning that disrupted students often lose their motivation.
“Students who aren’t motivated can’t score any better,” he told Fortune.
Despite everything, there are glimpses of hope. Fitsum praised schools like Furi for using creative assessment methods to improve learning outcomes even under tough conditions. If more schools follow their lead, the future of young learners may yet brighten.
Addis Abeba Officials Backtrack After Uproar Jolts Property Owners
A controversial decision to clear a large tract of land in Addis Abeba’s Wereda 1, around Flamingo and the Olympia roundabout, potentially affecting 31 properties, has been abruptly reversed, bringing relief to the property owners but leaving developers uncertain in its wake.
Kirkos District officials initially notified property owners in the upmarket neighbourhood that their land was needed for an expansion of the Oromia Regional State Presidential Office. The Regional State’s Communications Bureau announced in 2023 that the office project would cover six hectares and had been contracted to China Civil Engineering Corporation (CCEC) for completion within two years.
The unexpected news had thrown businesses into confusion, triggering anxiety among proprietors who own prominent establishments, including Hijira Bank headquarters, Lions Hotel, ABC Trading, Bemore Apartments, MSN Real Estate, and BH Apartments.
After a series of meetings last week with Wereda 1, Kirkos District, and city officials, including an audience with Mayor Adanech Abiebie on Thursday, April 24, 2025, property owners claimed to have received assurances that no demolition would take place. They also claimed that the Mayor confirmed that the cabinet had not approved the expansion, stating that the area, already developed, should remain undisturbed. District authorities also met with proprietors to “apologise for the mishandling of communications.”
The initial communication about the redevelopment plan was chaotic. Property owners were hurriedly called to discuss compensation before even receiving formal demolition notices.
Nuredin Hassen, a partner and board director at MSN Real Estate, thought the initial meeting with the District officials was about routine discussions for raising funds for development, similar to those held for the riverside project. However, the conversation quickly shifted to detailed compensation talks, including offers to cover rents.
The initial meeting between city officials and property owners revealed an early compensation plan for losses, covering two years of rental income, as well as replacement plots for relocation. A letter dated January 26, 2025, from Mesafint Assefa, director of the Land Bank & Transfer Directorate, instructed district officials to negotiate these terms.
In response, concerned property owners drafted an urgent appeal to the city administration outlining their grievances. Although city officials initially refused to accept the letter formally, it eventually secured them an audience with Mayor Adanech, according to the property owners.
In the letter, they argued that the buildings were legally developed, either through the city administration’s cabinet decisions or valid construction permits. They also stated the areaโs commercial value, noting its role as a hub for public bureaus, international companies, and hospitality services. The owners argued that demolishing such properties would not only ruin their businesses but also severely damage the trust of diaspora investors who returned to Ethiopia following government invitations.
Widespread panic among property owners prompted a second meeting with Addisu Shanko, head of Kirkos District, shortly after the Easter holiday. Addisu expressed surprise at the project’s scale, claiming he had not been informed, and swiftly assured the property owners that the demolition plan had been suspended indefinitely. He openly admitted the initial communication was mismanaged, calling the summoning procedure “unprofessional,” and promised disciplinary measures against the “responsible officials.”
The damage to business confidence has already been done. Some tenants began searching for alternative locations, while banks demanded additional collateral from property owners, reflecting heightened perceptions of risk. Sales at several ongoing apartment projects halted abruptly, heightening financial pressures on developers.
Nuredin disclosed that sales on three of their 15-storey apartment buildings ceased immediately following the initial announcement. Although over 90pc of these apartments were already sold, buyers quickly began demanding refunds. Banks also required new collateral arrangements, creating a severe financial squeeze for ongoing projects.
“I had projects that depended on this one,” said Nuredin, worrying about the cascading adverse effects of the announcement.
Concerns such as this persisted among business owners about the potential lingering impact of the debacle. A hotel proprietor, who had begun preparations to remove furnishings worth more than 100 million Br, voiced fears over irreversible financial losses if the city reversed its position again.
“We need assurance,” he said.
Addisu sought to allay fears like this, urging property owners to treat the matter as “just a rumour in the wind” and emphasising that future development plans would involve comprehensive dialogue with stakeholders first. Property owners say they are grateful for the timely intervention by Mayor Adanech and her administration’s officials.
“Weโre relieved,” said Yonatan Beyene, representing the developers of Bemore Apartments located off Africa Avenue (Bole Road).
However, despite the immediate relief, broader investor uncertainty persisted. Business consultant Terefe Jima warned that abrupt policy reversals like these severely damage investor confidence, potentially leading to job losses and undermining the local business environment.
“Investor uncertainty leads to investment reduction and, in the long term, political instability,” Terefe said.
He cautioned that sudden policy changes negatively impact banks’ willingness to lend, disrupt supply chains in construction, and lead to economic losses.
“Announcements like this will put local businesses out of the ring,” Terefe told Fortune.
BGI Ethiopia Wins Legal Battle as Ownership Claim Falls to Time
Key Takeaways
- A federal court dismissed Zewdinesh Getahun’s ownership claim as time-barred, requiring her to pay BGI’s legal fees.
- Forensic evidenceย claimedย forgery, but the statute of limitations prevailed over potential wrongdoing.
A federal court delivered a sharp rebuke last week to a long-running fight over shares in one of Ethiopiaโs largest brewers, dismissing an ownership claim by a former shareholder as time-barred and ordering her to pay the companyโs legal fees.
The legal battle between Zewdinesh G. Asrat, who asserted that she once held a 27pc stake in BGI Ethiopia Plc, bottlers of St George Brewery, only to have her shares “quietly transferred” during complex political events in the late 1990s. Zewdineshโs lawyers produced a forensic report dated April 21, 2025, identifying what they called โsignificant handwriting differencesโ in a 2001 signature purportedly from their client.
In her suit, filed in May 2024, Zewdinesh demanded reinstatement of her shares, valued at roughly 8.28 million Br, and compensation for unpaid dividends and damages. She named not only BGI but also Castel Groupโs affiliate, Brasseries International Holding (BIH), former CEO JeanPaul Blavier and Hebu Properties, the company she alleged received her shares. She detailed how BIHโs 1998 acquisition of St. George Brewery for 10 million dollars, through privatisation, left her with a legally recognised share, only for those holdings to vanish during boardroom reshuffles.
BGIโs legal team, led by Million Assefa and joined by counsel Solomon Emeru, countered that any challenge to her ownership was now barred by the Civil Codeโs tight time limits on contractual disputes. They argued that even transfers of โunmovable assets,โ such as land or property, yield to prescriptive periods once a set number of years has passed.
The Federal First Instance Court agreed. Presided by Judge Gerawork Yitbarek, the Court found that any grievance rooted in events more than two decades past should yield to the strict statute of limitations under the law.
However, in court filings, Zewdineshโs counsel at EthioAlliance Advocates LLP insisted that share certificates represent property interests that cannot be nullified by inaction. They framed the case as an ongoing violation of her rights, rather than a breach of contract, and pointed to health issues, partial paralysis and vision loss, that they claim prevented her from acting sooner.
They argued that because the dispute involved property rights, strict time limits should not apply. Zewdinesh also alleged that Hebu Properties Ltd unlawfully acquired over 6,000 of her shares through “fraudulent means” without her consent or compensation. Hebu was represented by Mieraf Gezai, who previously worked at Zewdineshโs distribution company.
They also alleged political pressures, including investigations into former federal government officials like Assefa Abreha, then chairman of the Privatisation Agency, created an atmosphere of intimidation.
The Court, however, found no sufficient evidence to support claims of political coercion or medical incapacity during the relevant perio
The forensic report, introduced in spring 2025, added fresh drama. On April 21, experts concluded that the signature on a key 2001 transfer document bore signs of forgery. Yet, Judge Gerawork declared that, regardless of its merits, the report came too late to revive a claim tethered to events in 1998 and 1999. He dismissed the suit and ordered Zewdinesh to pay 30,000 Br toward the BGI’s court costs.
โWhile the passage of time cannot perfect a violation of ownership rights where consent is absent,โ the Judge wrote, โthe law prescribes a limitation period that must be honoured to ensure legal certainty.โ
The verdict showed a tension between fairness to individual shareholders and the need for finality in commercial transactions.
Legal analysts say the ruling will have a chilling effect on other claimants from the privatisation drive. Under Ethiopia’s civil law, disputes over share transfers are treated as contractual matters subject to a two-year deadline from the date of the alleged wrong. Attempts to recast such claims as property suits, thus sheltering them from limitation, face an uphill battle.
โEven if the plaintiff presses on, the odds are slim,โ said Endris Smaino, a corporate law expert.
Medical records showed her health concerns emerged only shortly before the lawsuit, weakening her plea for equitable tolling. However, he believes a separate criminal case alleging fraud might be possible, though the same laws of limitation would pose challenges.
For BGI Ethiopia, the verdict offers a crossroads. The Brewer can choose to publicise the win, reinforcing its reputation for legal vigilance, or quietly seek a private settlement should Zewdinesh appeal. Legal experts say each path carries risks, an appeal could dredge up new evidence or prolong negative headlines, while a settlement might be seen as an admission of vulnerability.
Zewdinesh remains undeterred.
โI’ll fight till the very end,โ she told Fortune, after the judgment was read.
Her determination keeps alive the question of whether Ethiopiaโs markets can reconcile ambitious reform with robust protections for minority shareholders.
The conflict over BGI Ethiopiaโs ownership may now rest with the higher Court, where procedural issues will likely take precedence over substance.
Cash Starved Domestic Drugmakers Turn to EIC for a Lifeline
Key Takeaways:
- Ethiopian drug makers are seeking unconditional guarantees from the state-owned Ethiopian Insurance Corporation to access a 30pc advance, amounting to about four billion Birr, from the Ethiopian Pharmaceutical Supply Service.
- Local banks impose high collateral and service charge demands, prompting manufacturers to explore the state insurer as an alternative financial source.
- The envisioned shift could promote domestic pharmaceutical production, reduce import dependencies, and enhance access to affordable drugs.
- Policy initiatives seek to increase domestic procurement of medicines,ย showingย the sector’sย importanceย in meeting public health needs.
Cash-strapped drugmakers, squeezed by strict banking rules and rising fees, are pinning their hopes on the state-owned Ethiopian Insurance Corporation (EIC) as a means to new sources of working capital.
The manufacturers want to unlock a 30pc advance, about four billion Birr, from the Ethiopian Pharmaceutical Supply Service (EPSS), a federal agency, to cover day-to-day costs and keep production lines moving. But to receive that money, companies should present unconditional guarantees. Local banks, say industry executives, either refuse outright or demand steep collateral and quarterly service charges that reach 2.5pc, the equivalent of 10pc a year.
Over the past month, the Ethiopian Pharmaceuticals Suppliers & Manufacturers Sectoral Association has held talks with the insurer to see whether it will issue the guarantees at a lower cost and without tying up company assets.
โIt’s been too much trouble,โ said Association President Daniel Waktole.
He blamed banks for charging โinflated commissions while offering limited access to the needed facilities,โ but expressed optimism that the state insurer could deliver a โmore practical alternative.โ
The Pharmaceutical Supply Service signed 12 billion Br in six-month contracts with domestic companies last year to supply 120 categories of medicines out of a total of 782 to be purchased. Only nine firms are expected to claim most of that business, yet domestic output still covers only a third of the federal agencyโs needs. Manufacturers delivered 44pc of the 4.5 billion Br in agreed-upon supplies last year; the rest fell victim to financing woes.
To date, the Service has released 780 million Br in advances to companies that secured existing bank guarantees. Others are stuck waiting for the insurer to step in.
Under the proposed arrangement, manufacturers would obtain unconditional guarantees from the insurer, collect the advance from the supply agency and then ship the drugs.
Solomon Nigussie, deputy director general, disclosed that the federal agency supports the shift because โwe only trust the state-owned Corporation.โ According to him, steady cash flow is crucial if factories are to meet the countryโs demand for affordable medicine.
The risk is that a manufacturer could default.
Unconditional guarantees function as a financial shock absorber, protecting the advance if the supplier fails to deliver. The insurer has yet to put pen to paper, but companies such as Kilitch Estro Biotech see the scheme as essential. The firm landed a 522 million Br order from the supply agency last year, yet General Manager Daniel Waktole (PhD) said working capital gaps remain a chronic headache.
โLocal manufacturers have the capacity,โ he said. โBut, the capital constraints keep coming back.โ
Domestic producers have also asked the Commercial Bank of Ethiopia (CBE), a state-owned financial institution, for over seven billion Birr loan to open deferred letters of credit (LCs) for raw material imports. A three-way deal comprising the Bank, the EPSS and the EIC has been floated, but CBE has yet to respond.
The Pharmaceutical Supply Service, founded in 1947, channels medical goods to 5,000 health institutions through 19 outlets nationwide. In the last fiscal year alone, it pushed out 51 billion Br in supplies, financed by a mix of donations and direct procurement. Of its 21 billion Br distribution budget this year, 70pc pays for program medicines funded by the Ministry of Health, while the remaining 30pc, or eight billion Birr, supports supplies through a revolving fund for chronic treatments.
Officials want domestic manufacturers to lift their share of agency procurements from eight percent to 40pc this year and plan to increase to 60pc within a decade. Incentives include a 25pc price preference for domestic suppliers and special breaks for small businesses.
Still, the financing logjam remains.
Cadila Pharmaceuticals, which began as part of Ethiopiaโs first drug factory in 1964, is running at a quarter of its capacity. The company secured a 223 million Br contract but struggled to obtain the advance. According to General Manager Kanchan Banerjee, banks demanded 100pc collateral and โexorbitantโ service charges.
โAffordable guarantees have become remote,โ he told Fortune.
Kanchan welcomed the insurerโs potential role, hoping it could โunlock vital access to fundsโ after years of struggle.
New rules from the National Bank of Ethiopia (NBE) have not helped. A recent directive caps a bankโs combined loan and guarantee exposure to related parties, including customers with common shareholders, at 25pc of its capital. State-owned enterprises are exempt, but private manufacturers are not. According to a mid-tier bank president, who asked to remain anonymous, collateral is still crucial because โthe high financial risks involvedโ can wipe out depositor money when guarantees fail.
Demessew Kassa, secretary general of the Ethiopian Bankers Association, echoed the concern, noting that banks have lost โbillionsโ when projects collapsed.
โIt’s depositorsโ money after all,โ he said.
Ethiopian Insurance Corporation is not rushing the paperwork either. Zewditu Ayalew, a company representative, confirmed the negotiations but said the risk assessments are not yet finished.
โIt’ll have its financial benefits,โ she said. โBut, the pros and cons are being weighed.โ
The insurer was formed in the 1970s after the military government nationalised 13 private insurers. It now sells more than 45 insurance products through 61 outlets. Assets stood at 17 billion Br in June 2024, up 30pc from a year earlier, while gross profit jumped by 16pc to 1.34 billion Br.
The Health Ministry has thrown its weight behind the deal. State Minister Firehiwot Abebe recently asked the insurer to help issue guarantees. Birhanu Wolde, the Ministryโs finance manager, disclosed that policy reforms to bolster home-grown manufacturing and encourage public-private partnerships are underway.
โWe’ll provide support at every stage,โ he told Fortune. “Import substitution is vital for long-term stability, and locally produced medicine is key to transforming the sector.”
Yet, financial experts warn that adopting a blanket guarantee policy without adequate safeguards could lead to past losses being replicated.
According to Worku Lemma, a financial consultant, a single road-construction guarantee cost the banking system 800 million Br when the contractor disappeared.
“Financial mismanagement has been rampant,โ he said, urging careful vetting based on a companyโs financial record and performance history. โNot every business should be treated the same. Banks need to have clear strategies.โ
Industry officials say the urgency is hard to overstate. The pharmaceutical sector, born in partnership with Smith & Nephew Associates in 1964, still covers only a slice of domestic demand despite decades of government incentives. Domestic plants often sit idle due to a lack of raw materials and short-term financing, even as authorities push an ambitious plan to meet most of the country’s medicine demand at home.
The advance payment is one of several levers sought at closing to close that gap. Federal agencies hope that quicker cash will encourage plants to increase production, reduce import bills, and give patients easier access to affordable drugs. But until the guarantee impasse is resolved, factories will continue to juggle uneven cash flow, and the state may have to keep buying from overseas.
Ethio Telecom to Court Big Investors After Retail Share Sale Falls Short of Ambition
Takeaways
- Ethio telecom is opening its capital market offerings to institutional investors, targeting a 30 billion Br goal.
- The initial public offering saw 47,377 retail investors but raised only 3.2 billion Br, prompting a strategic shift.
- The Ethiopian Securities Exchange, slated to open soon, sees Ethio telecomโs offering as a major test of its systems.
- Ethio telecomโs new strategy focuses on improved governance amidst concerns over its current valuation.
Frehiwot Tamiru, CEO of Ethio telecom, is returning to the capital market after her debut share sale raised only a tenth of the proceeds she wanted. This time, the state-owned telecom company is removing the barriers that have kept large buyers and institutional investors, such as banks and insurance firms, on the sidelines.
Frehiwot disclosed last week that the second round, still part of a plan to raise as much as 30 billion Br, will welcome institutional investors, insurance firms and members of the Ethiopian diaspora willing to put up at least one million Birr.
โRestrictions will now be loosened,โ she said at a press conference she held last week at the Skylight Hotel, on Africa Avenue (Bole Road). โMany banks have already shown interest.โ
The first round, which closed on February 14, drew 47,377 retail investors who bought 10.7 million shares for 3.2 billion Br, equal to a 10.7pc subscription rate. Under the initial terms, an individual could buy as few as 33 shares, priced at 300 Br, although each represents 100 Br in par value, for 9,900 Br, and no more than 3,333 shares for 999,900 Br. The companyโs prospectus, published in October last year, put Ethio telecomโs post-money valuation near at 300 billion Br.
For many analysts, that number looked steep, and the retail-only cap pushed bigger check writers to the curb.
Frehiwot praised early investors and said their money is being held in an escrow account until the shares are registered, then deposited with the Central Securities Depository ahead of the Ethiopian Securities Exchangeโs (ESX) opening later this year. Still, she conceded that the heavy restrictions depressed demand.
โLoosening them has been necessary,โ she said.
One of the suitors is Sidama Bank, a two-year-old lender that operates in a crowded field of 30 commercial banks and some 12,000 branches nationwide. Its President, Tadesse Hatiya, disclosed he will put the matter before his board โin the coming week.โ
Sidama Bankโs books have grown quickly. Assets nearly doubled to 2.62 billion Br in the year ended June 30 from 1.32 billion Br a year earlier; deposits jumped fourfold to 1.22 billion Br; and, the loan portfolio expanded 97pc.
โIt’s a lucrative business with attractive returns,โ Tadesse said, cautioning that any stake should be weighed against liquidity needs.
That balance sheet pressure worries Worku Lemma, a veteran banking consultant. The laws cap bank equity investments at 20pc of paid-up capital, a limit some lenders have already hit while juggling a liquidity squeeze brought on by soaring loan demand and tight reserve ratios.
โBanks must study the risk,” Worku told Fortune. “They’ll not see immediate cash returns, and their own liquidity is under strain.โ
He also questioned the telco’s price tag.
โSelling a 100 Br share for 300 Br without a transparent valuation should raise concern,โ he said. “Investors will demand voting power and more transparent oversight. The government cannot keep a controlling grip forever.โ
Liquidity is equally scarce outside the banking hall. A bruising two-year inflation wave and higher borrowing costs have thinned household savings. Retail buyers found the 9,900 Br entry ticket steep; only 712 subscribers bought the maximum block of 999,900 Br. That left a wide gap between Ethio telecomโs ambitions and reality.
Mered Fikeyohannes, a corporate finance adviser, applauded the decision to let ordinary Ethiopians buy first, calling it โfitting for a company that the public has owned for generations.โ But he faulted the share saleโs messaging.
โThe equity story was not told well,” he told Fortune. “Many people never understood the opportunity. Financial literacy is low, and outreach was limited.โ
Mered sees untapped pockets of domestic capital. Public and private pension funds hold roughly 450 billion Br, most of it parked in Treasury bills (T-bills) that pay a negative real yield. Insurance companies face similar limits. Amending those directives, he argued, could redirect long-term money into equities and help Ethio telecom reach its target.
โThe investment landscape itself has to improve,โ he said.
Ethio telecomโs numbers are solid by emerging-market standards, though critics say they do not justify the valuation. The company reported revenue of 91.4 billion Br in fiscal 2024, up from 71.5 billion Br the previous year, and serves 78.3 million subscribers โ about 94.5pc of Ethiopiaโs mobile phone market โ on a network spanning 8,538 towers and tens of thousands of miles of fibre. Profit figures were not disclosed in the prospectus, and the wide discount at which Safaricomโs local venture trades in Nairobi makes investors wary.
The IPO is also part of a broader, stop-start privatisation. In 2021, the federal government announced it would sell as much as 40pc of Ethio telecom to foreign strategic investors; macroeconomic turbulence put that plan on ice. Two years later, officials tweaked the blueprint to float 45pc and reincorporated the utility as a share company last June.
Brook Taye, who heads Ethiopian Investment Holdings, the state-owned conglomerate steering the process, told Bloomberg a few months ago that the second offering will act as a dress rehearsal for future listings of state enterprises. Brook said the prospectus โmeets the highest standardโ and that foreign buyers could join once secondary-market trading begins.
While Ethio telecom readies its second call for cash, the first batch of buyers is waiting on paperwork. It began taking orders on October 9 and was due to close the books on January 3. By that date, 43,848 investors had bought 8.78 million shares for 2.64 billion Br. Management won a six-week extension that attracted another 3,529 investors with 1.87 million shares worth 571.7 million Br.
Eventually, the subscription settled at 10.7 million shares for 3.2 billion Br, making scarcely a dent in the 30 billion Br goal.
Analysts say a successful second round would inject credibility into Ethiopiaโs still-nascent securities regime. The ESX, slated to start trading later this year, is racing to set clearing and custody rules before any large issuer can float. Ethio telecom is expected to be among its first listings, a high-profile test of trading, settlement and disclosure systems.
โWeโve already started the process of being publicly listed on the secondary market,โ Frehiwot said.
Investors who missed the first window may find more room this time, but they will need to read the fine print. Worku believes the real hurdle is governance.
โInvestors want to know what they can gain,โ he said, arguing that major shareholders will insist on board seats, audited statements and dividend clarity. โIt needs to look into its unclear structure.โ
Even Sidama Bank, eager as it is, intends to move carefully. According to Tadesse, directors will review stress-test scenarios to ensure the outlay will not restrict lending.
โWe see opportunity,โ he said. โBut we must assess without hurting liquidity.โ
Ethio telecom is not waiting. Company executives are holding roadshows targeting diaspora hubs such as Washington, London and Dubai. They also have in mind domestic institutions, among them a pension system that covers 1.8 million civil servants, and privately managed funds that are still in their early stages. The company says it will update its prospectus with nine months of fresh financials before the second offering.
Whether lighter rules and deeper pockets are enough remains to be seen. But, banks remain cautious, and household spending is tight. Still, Frehiwot is betting that brand recognition and a dominant market share can win over sceptics.
โWe achieved our aim in the first round,โ she said, insisting the exercise built trust in a country where stock ownership is new to most citizens.
Opening the gate wider, she believes, will finish the job.
Digital Shift in Veterinary Drug Registration Struggles Against Glitches, Gridlock
Key Takeaways:
- As of January 2025, all veterinary drug registrations are processed digitally underย a new directive by the Ethiopian Agricultural Authority.
- The transitionย aspiresย to simplify submissions and strengthen archival integrity, yet technicalย glitchesย such as server downtime persist.
- The directive encourages domestic production, yet importers still supply the majority of the market.
- Certification protocols ensure medicines meet robust international standards, though the systemโs efficiency is under scrutiny.
- Authorities are urged to balance digital initiatives with traditional processes toย addressย transition woes.
The veterinary drug registration process moved fully online after the Ethiopian Agricultural Authority (EAA) rolled out a new directive in January 2025, requiring all applications, whether for imported or domestically produced medicines, to be filed through its electronic service system.
Officials believe that formalising the process in digital form would simplify submissions and help the Authority build reliable archives.
โItโs important to clarify this because,” said Hailu Zeru, a drug registration and permit officer at the Authority. “We use the guidelines to collect information, even though itโs not considered law.”
Under the directive, importers should secure certification before bringing any veterinary drug into the country. Among the requirements is a mandate that a recognised pharmacopoeia, an official publication that sets legally binding standards and quality specifications for medicines, backs every medicine. This publication is limited to those from Britain, the United States or Europe. Drugs sourced from other major suppliers, notably China and India, should demonstrate full compliance with these standards.
The Authority oversees four regional centres in Dire Dawa, Bahir Dar, Hawassa, and central Ethiopia, and has a network of 45 sub-centres. In the five years leading up to the directive, inspectors revoked 28 veterinary-drug certifications and rejected 11 products after on-site inspections, signalling the EAAโs growing emphasis on enforcement.
Historically, 90pc of the veterinary drugs have been imported through over 110 licensed importers, who handle some 68 different types of medicines. Certification entails a multistep review, including evaluation, laboratory testing for quality and safety, and inspections of foreign manufacturing facilities. Companies submit proof of good manufacturing practice compliance, an original certificate for the pharmaceutical product, and, where relevant, pesticide product certificates.
In the nine months, 2,850tns of veterinary drugs passed quality and safety inspections, down slightly from 3,043tns in the same period last year. Annual spending on veterinary medicine continues to exceed 45 million dollars.
Yet, the new system has exposed technical weaknesses that threaten to upend the very efficiencies it seeks to deliver.
Rainoff Trading Plc, one of the largest importers, has struggled with repeated server outages and sluggish file uploads.
โWeโve been trying to upload a file for over 10 days without success,โ said Natnael Mekonnen, the companyโs general manager.
When importers split large submissions into multiple parts to meet the systemโs 10 megabyte limit, they often encounter misstaging errors that further delay review. In some cases, timelines to recieveย certificaitons for drug inspectionย extend upto two years.
Others warn that the shift to electronic registration may carry unintended risks. Because the directive accepts pharmacopoeias from Britain, the United States and Europe without additional scrutiny, substandard or counterfeit drugs could slip through if the system fails to verify their provenance.
According to Dagninet Yimenu, a veterinary importer and pharmacist, digitising the registration process is a step forward.
“But, adaptation remains a challenge,โ he said, noting that after submitting applications, he often waits more than two weeks without any response. “Bank payment integrations have slowed so seriously that routine transactions now drag out over several days.”
Despite these complaints, the Authority’s officials frame the system as an opportunity to broaden local drug manufacturing. Hailu believes e-service registration will allow producers to register new medicines directly, reducing dependence on importers of established brands. He argued that while routine products may queue at the end of the line, essential drugs, such as treatments for drought-stressed livestock or postpartum cows, are fast-tracked during emergencies and disease outbreaks.
The Ethiopian Animal Health Institute, which produces vaccines domestically, still relies on imports for more than 85pc of its veterinary drug inputs.
Alemayehu Feyissa, the Instituteโs marketing team leader, disclosed local production to have reached upto 10 million boluses annually, roughly half of the Instituteโs 20.5 million unit capacity.
โImported medicines sometimes donโt match the diseases we face locally,โ he told Fortune. “The potential benefits of a clearer and more accessible registration pathway for domestic manufacturers are great.”
But the Instituteโs deputies insist that digital progress should not come at the cost of system dependence.
Berecha Bayissa, the institute’s operational deputy director, welcomes the clear framework but urged that keeping a traditional option, such as in-person visits, during the transition would have cushioned stakeholders against technical hitches.
Abyssinia Animal Drug Importer & Wholesaler Association represents more than 110 members. Its board member, Sileshi Mekonnen, revealed that inspection fees, which run 4,500 dollars for facilities in Africa and Asia and 6,500 dollars elsewhere, compound the burden on companies already struggling with digital delays. Drugs backed by UK, US or European pharmacopoeias dodge those fees, but the Association’s leaders question whether the e-service is functional enough to justify the advantage.
โThe online system is good,” said Sileshi. “But, the question is whether it is functional and easy to apply through.โ
Behind the scenes, the Authority is scrambling to shore up the platform. Officials acknowledge that large scientific papers, which routinely exceed 100 megabytes, cannot be uploaded in one piece, so a stopgap rule allows for split files.
โThe system is still a problem for us,โ Hailu conceded, even as he touts the benefits of digital storage and reduced inperson visits.
According to veterinary experts, durable infrastructure should match procedural upgrades if the initiative is to succeed.
Elias Demeke, a veterinarian with two decades of experience, working for Eagle Animal Clinic & Drug Shop, praised the systemโs interactive features but warned that frequent service interruptions and file size limits could make the process more burdensome than the old manual-based approach.
โThey should have skilled personnel, a standby generator and a reliable network,โ he said.
Hailu confirmed that IT support and backup power are already in place, and that coordination with regional centres is improving steadily.
Sidama Bank’s Bold Start into Commercial Banking Meets a Tough Reality
Key Takeaways:
- Sidama Bank’s assets surged to 2.62 billion Br by 2023/24, doubling from the prior year.
- Operational costs and branch expansion pressed profitability; net profit halved to 27.1 million Br.
- Substantial growth in deposits signals rising customer trust, posing both opportunities and risks.
- The Bank’s strategic focus on low-risk lending and export sectors presents potential, yet requires diversification.
- Operational efficiencies, digital adoption, and partnership strategies areย seen crucialย for sustainable growth.
Sidama Bank entered the competitive banking industry in 2022, emerging from microfinance roots with ample capital, limited infrastructure, and ambitious plans to carve a niche among established private banks. Two financial years later, the Bank presents an unusual contrast. It has exhibited rapid asset growth paired with declining profitability, a challenging puzzle facing its President, Tadesse Hatiya, and the board of directors.
The broader banking industry has expanded considerably, keeping pace with the country’s growing GDP. Private banks collectively reported total assets of 3.3 trillion Br by June 2024, marking a 28pc increase from the previous year. Deposits grew by 30pc to 2.3 trillion Br, boosted by expanding money supply. While the state-owned Commercial Bank of Ethiopia (CBE) maintains dominance, accounting for over one trillion Birr in assets, it is the numerous private banks that shape the competitive environment.
Sidama Bank is one of the smaller financial institutions, trying to overcome intense competition in a market of 30 commercial banks and approximately 12,000 branches nationwide.
Despite its newcomer status, the Bank has aggressively grown its assets and deposits. Its total assets nearly doubled to 2.62 billion Br in the fiscal year ending June 30, 2024, up from 1.32 billion Br the previous year. Deposits expanded dramatically, from 299 million Br to 1.22 billion Br, signalling growing confidence from customers. Loans surged by 97pc, while cash and cash equivalents climbed 79pc.
Yet, financial analysts see behind these impressive numbers a concerning reality. Increasing operational costs, notably salaries, benefits, and expenses tied to branch expansion, have squeezed profitability.
Tadesse acknowledged these concerns and noted that salary revision was necessary when evolving to a bank.
“Weโre focusing on microcredit lending with full force,” he told Fortune, confident that the Bankโs determination to diversify income sources.
Interest income, the Bank’s primary revenue driver, climbed by 78pc to 270.8 million Br, while other income grew by 21pc to 73.9 million Br. Total revenue reached 348.6 million Br, up 26pc.
However, profitability sharply declined. Net profit fell by nearly half to 27.1 million Br due to surging costs. Wages and benefits alone jumped by 65pc, totalling 155.9 million Br, as the Bank expanded to 39 branches (adding eight) and grew its workforce to 700 employees. Operating expenses climbed to 319.2 million Br, a 50.7pc jump, consuming 91.5pc of the net operating income.
Financial analysts such as Aminu Nuru depicted Sidama Bankโs main challenge tersely: “The Bank faces challenges in profitability, mainly in controlling its costs.”
The sharp increase in expenditures drastically affected its key performance metrics. Earnings per share (EPS) dropped enormously, from 15.6 Br to 3.3 Br, largely due to diluted share values following the new shares issued. Return on Equity (RoE) plummeted to 2.49pc, exhibiting a nearly four percentage point drop, and Return on Assets (RoA) dropped from 4.05pc to 1.04pc, numbers industry observers say should alarm shareholders.
Tadesse attributed rising costs to necessary regulatory compliance and aggressive growth strategies. According to him, Sidama Bank has been actively working to improve efficiencies, manage costs, and adjust interest rates.
“Weโre working on guarantees, collaterals, and cost minimisation,” he told Fortune.
However, the Bank’s liquidity situation has improved substantially. The loan-to-deposit ratio, once alarmingly high at 246pc, moderated to 90.8pc, although still high compared to the industry average of below 70pc, indicating better balance sheet management. However, liabilities ballooned by 209pc to 1.53 billion Br due to increasing deposits and borrowings. Demand deposits alone surged dramatically, unveiling greater public trust but also adding pressure through higher interest costs.
Currently, 65pc of Sidama Bankโs loans focus on housing, viewed generally as low-risk. Aminu, a financial analyst based in Doha, Qatar, cautioned that this strategy might expose the Bank to sector-specific risks and urged greater diversification.
The President concurred. Tadesse noted the Bankโs prudent credit management, maintaining non-performing loans (NPLs) at 2.96pc, well below the industryโs 5.6pc average. Expansion into export sectors, especially coffee, aligns with the Bankโs strategic direction.
“We plan to expand into the export sector,” Tadesse explained. “Weโre just getting started.”
A graduate of Addis Abeba and Greenwich universities, Tadesse previously held roles at the CBE, the Development Bank of Ethiopia (DBE), and Berhan Bank. For him, meeting the minimum capital requirement is also a personal goal.
“Itโs what I would like to accomplish during my tenure, more than anything else,” he said.
Sidama Bank began operations with an initial paid-up capital of 574 million Br raised from 1,998 shareholders. By 2024, its capital has doubled, contributed by 2,400 shareholders. The Bank targets a capital base of five billion Birr before 2030 to comply with central bank regulations. Its Board Chairman, Abraham Mareshalo, urged shareholders to invest further, stating that insufficient capital limited partnerships with international remittance institutions.
Sidama Bankโs transition from microfinance to a commercial bank mirrors industry-wide shifts seen in Siinqiee, Tsedey, Omo, Somali and Addis microfinance institutions. Initially founded in 1994 as Sidama Rural Womenโs Credit & Saving Scheme, serving women entrepreneurs in Bensa Wereda, funded by Irish Aid, it evolved through major structural and capital growth. Four years later, it evolved into a microfinance with a registered capital of 200,000 Br.
Its equity in 2023/24 already constitutes 42pc of its total assets, a substantial buffer, yet it still needs to quadruple its capital base. The Sidama Regional State, owning 70pc of the shares, pledged further investment, along with coffee cooperatives and exporters, demonstrating strong regional support.
Shareholder Zerihun Kamiso, of Paradise Hotel in Hawassa, expressed confidence, praising the Bankโs efficient loan approval processes and robust market strategies.
“They’re off to a good start,” he said.
Nonetheless, fourth-generation banks like Sidama have faced regulatory headwinds, notably credit growth caps. Despite these limitations, Sidama Bank’s net loans grew by 90pc to 1.17 billion Br. However, increased expenses from expanding branches, recruiting aggressively, and adopting a new core banking platform strained profitability. The Bank’s cost-to-income ratio soared to 103pc, considerably above the industry average of around 55pc and far higher than top performers like Awash Bank.
While Sidama Bank maintained an asset-to-equity ratio of 2.4, half the industry’s conservative standard, it consequently suffered lower returns. Its cautious financial leverage meant that even an 11.8pc asset productivity, nearly matching peer competitors like Amhara Bank, translated to a low RoE. Competitors such as Hijra Bank, which began operations around the same time, achieved much higher returns.
Sidama Bankโs deposit mobilisation remains robust, with an average of 31 million Br per branch, although it is much lower than established banks like Dashen. Its deposit composition favours low-cost savings and demand accounts, helping reduce interest expenses but increasing the risk of deposit runoff during instability.
For Aneley Bogale, who joined Sidama Bank after moving from Global (Ethiopia) Bank, the strategic approach to customer outreach and operations is key. She manages the Menehariya Branch in Hawassa City, where she leads a team of 21 and is responsible for cultivating a banking culture, coaching staff, and managing daily operations.
“We had a focused and targeted strategy,” she told Fortune, noting that convincing new customers of the Bankโs business focus, rather than its regional affiliation, was a challenge. Nevertheless, the branch successfully increased lending to SMEs and community institutions such as “Edir” and “Equb.”
โWe had to find opportunities and work around that,โ she said.
To manage liquidity risks, Sidama Bank maintained substantial cash reserves and Treasury bills (T-bills). Analysts attribute high inflation, negative real interest rates, and ongoing currency depreciation to be critical for careful asset-liability management.
Sidama Bank has embarked on a 10-year strategic plan prioritising digital adoption, operational efficiency, partnerships, and diversification of income streams. Initiatives include expanding mobile banking and trade finance services targeted at southern Ethiopiaโs vital coffee and horticulture sectors. Beyond USSD and ATM services, Tadesse disclosed, Sidama Bank is preparing to launch an omni-channel platform with digital lending capabilities. It has also partnered with EthSwitch and Telebirr to broaden its outreach.
According to Aminu, success will depend on effective execution and cost control. However, Sidama Bank’s equity structure supports potential consolidation moves. It can pursue rapid scale through potential mergers or carve out a focused niche in regional agribusiness finance, leveraging local market insights.
Elizabeth Woldegiorgis, Who Brought Ethiopia’s Forgotten Modernists Back to Light, Dies at 69
Elizabeth Woldegiorgis (PhD) began the morning of September 11, 2001, like any other. She drank warm coffee, took an ordinary phone call and lingered in the lobby of the Japanese investment bank where she worked before heading up to her desk on the 53rd Floor. Minutes later, the first plane hit the World Trade Centre (WTC). She escaped, but the blast tore up her plans. She never returned to finance.
Survival pushed her toward older passions: art, scholarship and discussion. She enrolled in a doctorate program in the history of art and visual studies at Cornell University, where she met the literary scholar Dagmawi Woubshet, a professor who became a lifelong friend.
โShe was bold, principled, and witty,โ he said, remembering how she challenged every seminar text.
Elizabethโs thesis excavated Ethiopian modernism, bringing painters and sculptors who had been erased from the record back into the spotlight. That rebellion had personal roots. She grew up as the youngest of seven. Her father, an Orthodox Church scholar from the Northern Shewa area, the first editor-in-chief of the state-owned Amharic daily “Addis Zemen,” told his children that life spuns around three fixed stars: God, the Emperor and kin. At Nazareth School, a Catholic girlsโ school in Addis Abeba, she glimpsed another constellation and chose her own guiding lights: art, freedom and fearless talk.
Politics strained the family after she moved to the United States. She drifted from one of her brothers, Dawit, a major in the army and a senior government official during the Derg era, best known for his role as chief of the Relief & Rehabilitation Commission (RRC). The quarrel lasted for years until a face-to-face meeting at a hotel thawed it, which still makes him teary when he recalls the moment.
โShe had a way of melting anger with honesty,โ he recalled. โThe way she expressed brotherhood and politics will stay with me forever.โ
From the start, Elizabeth wanted spaces where ideas collided in public. As director first of the Institute of Ethiopian Studies (IES) and later of the Modern Art Museum โ Gebre Kristos Desta Centre – she shook dusty archives awake. Her book, “Modernist Art in Ethiopia,” a winner of the Bethwell A. Ogbot Prize, incorporated neglected artists into a proud but contested history and challenged the silences imposed by emperors and revolutionaries.
โShe picked the Institute up from the ground and paved the way,โ said Dagmawi, who credits her with drawing him back to Addis Abeba to present a paper.
She staged major shows, including a retrospective on her friend Skunder Boghossian, whose restless spirit she captured in essays.
Authenticity earned her friendships that jumped age, class and geography, but it startled the stiff-collared.
Bekele Mekonnen (Prof.), a colleague, remembered a woman who could slip from bar talk in Addisโs quarters to an art symposium in Sharjah.
โShe disdained the pretenses of conventional formalities during critiques, debated fiercely and spoke loudly,” he said.
Travel never loosened her grip on home. Whether in Vienna, Belgrade or the Gulf, she stitched stories from Ethiopia into every conversation. She fought for women air-brushed from modernityโs canvas and, in a manuscript finished in 2023, showed how exclusion was baked into cultural politics. She lived that principle too, choosing partners, houses and rituals on her own terms and setting an example for younger women boxed in by custom.
Her flat in Addis Abeba was legendary. Visitors recall the blue haze from her Captain Black pipe, the plates of food and the talk that ran past midnight. Dagmawi still sees the waiter who froze when he spotted a woman puffing on a pipe in a city cafรฉ. Elizabeth only laughed.
Was this something he was not supposed to see?
โElsi knew how to lighten the mood,โ he said.
Music fed her. She loved sushi in Manhattan, Madingo Afeworkโs album “Godanaw” and the aching voice of Asnakech Worku, whose songs she sometimes sang for friends.
Yet, the last years weighed heavily. She mourned the loss of her friend Andreas Eshete (Prof.), a prominent intellectual who once presided at the Addis Abeba University, and her childhood home in Addis Abeba, demolished before she could turn it into a museum.
โShe was vulnerable just as much as she was bold,โ said Dagmawi.
Even as her health faded, Elizabeth kept drafting articles, plotting conferences and whispering about the next book. Her last curatorial project stepped further outside accepted frames. Working with the artist Henok Melkamzer, she championed “telsem”, Ethiopian talismanic drawings of symbols and spells, insisting they were modern in their own right.
Elizabeth often admitted that the switch from Wall Street spreadsheets to campus libraries was terrifying. At the bank, she had thrived on hard numbers: foreign-exchange trades, yield curves, the drill of profit and loss. At Cornell, she swapped profit targets for footnotes and learned that a half-forgotten mural could hold as much truth as any balance sheet. Friends joke that she turned those quantitative instincts to grant applications, reading every line of small print before a curator signed.
Her overhaul of the Institute was dramatic. She digitised 40,000 photographs, catalogued manuscripts that had been gathering dust since the 1960s, and opened a reading room that stayed busy until midnight. When funds ran low, she called former bankers, shamed ministers on live radio and persuaded embassies to sponsor conservation workshops.
The Modern Art Museum was more fragile, consisting of a handful of rooms in the old palace’s stable block. Elizabeth hustled up the scaffolding, rewired the galleries, rigged new lights, and doubled visitor numbers within two years. Ticket sales jumped by 65pc, a statistic almost unheard of in Ethiopiaโs underfunded cultural sector.
Students remember that she never let them hide behind jargon.
โExplain it so your grandmother understands,โ she would insist during critiques.
Yet, Elizabeth had no patience for lazy compromise; a mis-hung painting could trigger a fierce monologue on dignity and labour. On quiet evenings, she played “Godanaw” on repeat while editing. When the Asnakech song ended, she knew the draft was done. Then she would email peers across three time zones, make another pot of coffee and start again.
Colleagues say she brought the same drive to Sharjah, where she helped build the Africa Institute from scratch. She designed programmes on cinema from the Horn, feminist writing across the Sahel and the role of port cities in culture. She insisted that academic prose make sense to the people whose stories it described. After lectures, she paced hotel lobbies, pipe in hand, hammering a thesis into shape until the call to prayer drifted across the corniche.
Elizabeth died on March 16, 2025, in Sharjah. She was buried at Holy Trinity Cathedral in Addis Abeba.
Friends and family agree that Elizabeth’s legacy lies in the act of seeing โ seeing art as part of a global discussion, and seeing women whose stories had been erased as full creators of culture and meaning.
Birr on the Rocks as Forex Auctions Chase Ghosts of Stability
Key Takeaways
- The Birr has been persistently weakening against the US dollar, despite changes in foreign exchange policy.
- Discrepancies between theย NBE’s auction prices and commercial banks’ market ratesย revealย systemic tensions.
- Banks are using incentives like bonuses and premiums to attract remittances and stay competitive, raising questions about the efficiency of the forex market.
- The divergence in exchange rates impacts various economic players, from exporters to ordinary citizens, stoking speculation.
- Policymakers are at a critical juncture and may need to adjust auction frequency and regulations to prevent further market destabilisation.
Ever since policymakers loosened their grip on the foreign exchange regime last August, the Birr (Brewed Buck) has marched lower against the U.S. Dollar (Green Buck).
Yet, the National Bank of Ethiopiaโs (NBE) twice-monthly currency auctions, a mainstay of the new policy, have shown the opposite pattern. Official clearing prices have kept edging down, even as commercial banks quote higher cash rates at their counters.
The contradiction came into sharp focus on April 17, when the Central Bank sold 70 million dollars, meeting what it said was โ96pc of banksโ foreign exchange demand.โ Twenty-six banks joined the round, compared with 27 at the previous sale on March 31.
The weighted average price slipped to 131.49 Br for a dollar from 131.70 Br, extending a slide from 135.61 Br set on February 25, when 50 million dollars went under the hammer.
Commercial banks tell a different story.
In the six days beginning on April 21, the industryโs average cash buying rate was 130.51 Br, while the average selling rate reached 133.03 Br. Oromia International Bank posted the weekโs highest cash buying price, 132.53 Br, and the top-selling quote, 135.18 Br, both on April 26.
At the other end sat the state-owned Commercial Bank of Ethiopia (CBE), whose buying and selling rates had barely moved for months, despite market volatility. Its buying price was a mere 124 Br and selling was at 126.48 Br.
CBEโs cut-rate quotes make it the marketโs most conspicuous outlier, but the Bank is not conceding business. It quietly tacks on a 12-Br bonus for every dollar surrendered at the counter, lifting the effective rate toward private-bank territory. It is a lute meant to entice mainly remittance senders to bring dollars in through official channels.
Private lenders are matching the move with their off-menu sweeteners.
Zemen Bank is offering a four-percent premium over its posted rate, while Wegagen Bank is dangling two percent. Bank treasurers say the add-ons keep them in the hunt for foreign-currency deposits, especially the remittances that keep Ethiopiaโs external accounts afloat, without running afoul of the regulatorโs price caps.
Most other major banks, including Abyssinia, Awash, and Dashen kept their official quotes steady through the week, nudging them by only a few cents. That caution speaks to an industry trying to ration scarce hard-currency liquidity while staying within the Central Bankโs narrow tolerance band.
The NBE itself trades in the same market, and its officials behaviour is equally tactical.
During the week, the NBEโs spread, the difference between its buying and selling quotes, was the tightest in the system, a wafer-thin 0.09pc on April 21 that widened to 0.75pc by April 26. Those swings, bankers say, reveal liquidity management rather than pure market forces.
Odd blips appeared elsewhere.
Bunna Bank, usually a follower, opened on April 21 with a spread of 1.22pc, under the customary two percent. By April 24, it was back in line, unveiling a grab for market share. Hijra Bank, by contrast, inched both its buying and selling offers higher each day.
All of this leaves the official auction looking increasingly disconnected from reality. The NBE has lifted the allotment twice, from 60 million dollars early in April to 70 million on April 17. Nonetheless, the clearing price keeps falling.
Commercial banks, facing customers who will not part with their dollars cheaply, are paying more, not less. The 12-Br bonus at CBE and the percentage premiums at Zemen and Wegagen make clear where demand really sits.
The divergence matters because the auction price serves as an anchor for expectations about and price discovery of the Birr. A falling anchor, coupled with rising counter rates, feeds the perception that the Brewed Buck is headed for another leg down. That risk is heightened by the shaded parallel market, where the dollar commands an even richer price at 154 Br last week.
Policymakers concede the tension but say the auction is doing its job by rationing scarce supply in a transparent way. Forex market observers see that the mechanism is too infrequent โ if it can be sustained at all โ and too blunt to drain pent-up demand. They worry that if reserves slip further, Governor Mamo Mihretu will have to choose between shrinking the allotment or letting the price jump, both of which could spook the market.
That the forex system is showing the strain is evident. Banks have little choice but to tack on incentives, eroding their fee income. Importers complain that even when bids are filled, the wait for letters of credit permits can stretch weeks. Exporters, seeing the Birr weaken, hold back earnings in foreign accounts.
Ordinary Ethiopians, sensing the drift, convert what they can the moment relatives send money from abroad.
The experiment in forex liberalisation was supposed to smooth the Birrโs descent, not accelerate it. The events of late April uncover that the policy is at a crossroads. Unless officials recalibrate, perhaps by moving to weekly auctions, widening the trading band or easing paperwork for diaspora deposits, the gap between the auction hall and the cash counter will only grow, inviting the speculation the forex regime was designed to quell.
The Brewed Buck may be losing its foam, but it still costs more at the bar than at the brewerโs gate. Until that changes, the currency market will remain caught between two prices and one unrelenting demand for dollars.